News that the price of a loaf of bread is set to rise by 40-60 per cent here in the wake of even steeper increases in international wheat prices brings it home with a sharp jolt that a long period of low food inflation has come to an end. We have become so used to cheap or stable food prices over the last generation that this may come to many as a surprise. Changes in world demand for grains and cereals explain these trends. They are also driven by associated shifts in production caused by climate change - and both factors are set to endure.
Although the impact of such rises will be mitigated for many by greater prosperity which reduces the proportion food takes up in the family budget it would be foolish to disregard the effect on poorer families. All will feel the impact of higher inflation. And this will be compounded by the generalised effect of higher commodity prices throughout the domestic and international economy arising from land use transfers from wheat to biofuels to counteract growing oil shortages. Yesterday, for example, the Irish Farmers' Association underlined how the pig industry's future is threatened by higher grain prices which can account for 85 per cent of its production costs.
These relations between food and energy sectors and the local and world economies are set to become a more standing feature of our lives in years to come. Protests about increasing prices for primary food have been seen in Italy, Germany, France, Mexico, Burma, China and India in recent months. Indeed the head of the United Nations Food and Agriculture Organisation (FAO) has warned of increased social conflict in poorer parts of the world as these trends intensify. Political conflict is likely to follow, as has been the consistent case historically - not least during the Russian revolution whose ninetieth anniversary falls this week.
Huge increases in demand for biofuels to reduce US dependency on imported oil have distorted world patterns of demand and supply. So have shifts from vegetable to meat and dairy based diets in China and India. Climate change induced drought in Australia's wheat growing regions has halved normal production. Their milk output is sharply down because of wheat shortages.
So the whole world can be seen in a grain of wheat. Understanding that is no excuse for producer profiteering or consumer complacency. Price turbulence on this scale creates many opportunities for sharp practice, hoarding and rank injustice. But these changes can be turned to advantage if they raise consciousness about the precarious balance between our food and energy futures.